Beneficial Interest - do I want it??

MissCynical

Hi all, am in a bit of quandry at the mo! I had a call from the OR a week ago asking for a valuation of our house as I had indicated that I'd like to buy the Beneficial Interest a couple of months ago but that they needed a valuation. I'm going to get a valuation done but I'm not sure whether I want the BI or not! I can afford the mortgage at present but if interest rates go up too high I might not be able to afford them in the future. If I buy the BI and the house ends up getting repossessed then I think the shortfall wouldn't be included in the bankruptcy, is this right?

The other thing is that I got my mortgage on a self-cert basis 6 years ago and if the lender is no longer doing self-cert mortgages (and add in the fact I am now BR) would they let me have a mortgage even if on a variable rate or would they make me sell the house. My mortgage product comes to an end early 2011 and whilst the lender has made no mention of my bankruptcy, the OR says that they do know about it.

If I buy the BI now then the mortgage redemption penalty on my mortgage, with estate agents and solicitors fees would take me into negative equity. If I wait til after the mortgage product finishes in early 2011, when there will be no redemption penalty, then I will probably have to buy the BI for more than the £1 that I could pay now. Decisions, decisions!

Just to make things more complicated (and without going into detail right now as too long winded) I managed to get my home insurance voided recently so am without any cover should the house be set alight or flooded! Obviously I couldn't afford to repair or rebuild!

I can't afford to rent anywhere as cheaply as my mortgage payments and I'd like to keep the house, however, if there is a fire or it gets repossessed and I don't buy the BI within the 3 years then I haven't lost anything - apart from the shirts off our backs! I only mention the three years as I believe the house passes back to us after that time if there isn't any equity in it?

If anyone likes a little brain tickler then maybe they could help with some suggestions or advice.

Many thanks, MissC

nervousmother

Only you can answer your own question :-)

write down all the pro's and con's for keeping it.

My main worry in your position is if interest rates went back up could you afford it? if the lender wont remortgage when your deal comes to a end you will be put on variable rate and although good at the minute what will it be like then.. 2 years away you will still be suffering the poor credit record BR will give you.

However, if you did stay in the property for the next 3 years as its cheaper than rent you wont have anything to loose however the OR may dispose of it before the 3 years is up.

That said you may not get the chance to own your own property for another 6 years so think long and hard. Sorry I can give you a do or dont do answer.

peachyprice

The IS has confirmed, on many occasions, and in writing, that buying the BI does not mean the mortgage shortfall would not be included in your BR at a later date, the two are apparently unrelated.